TrustPower Ltd., the operator of New Zealand's largest wind farm, fell the most in more than three years in Wellington trading after it said low hydro-lake levels and high spot power prices may cut full-year earnings.

The company's power generation since March is almost 25 percent below average, forcing it to buy supplies at spot prices, Tauranga-based TrustPower said in a statement today. The stock dropped 4.8 percent, the biggest decline since September, 2004.

Heavy industry is cutting production and households are being asked to conserve power after drought across much of New Zealand drained the nation's hydro-electricity reserves and pushed power prices to an all-time high last month. Dams, which usually generate more than 60 percent of the country's power, were 45 percent below average yesterday.

TrustPower's generation in the three months "is the worst we've had,'' Chief Executive Officer Keith Tempest said in a telephone interview from Tauranga. "For some of the catchments it's been the worst in their history.''

TrustPower shares fell 40 cents to NZ$8 at 5 p.m. in Wellington, the lowest close in five weeks.

The company, the nation's fifth-largest energy retailer, uses dams and a wind farm in the Tararua Ranges on the North Island to supplement electricity it buys from rivals. Earnings before interest, tax, depreciation and movements in financial instruments may be NZ$20 million ($15 million) less than in a year of average rainfall.

Previous Earnings

TrustPower reported net income of NZ$98.1 million in the year ended March 31. Operating earnings were NZ$208 million or about NZ$15 million less than expected in a year of normal wind and rainfall, the company said in a presentation to investors last month.

Low rainfall and lack of wind in May will cut the company's generation in the three months ended June 30 by about 140 gigawatt-hours, requiring it to buy as much as much as 40 gigawatt-hours of energy at spot rates, Tempest said.

Power in Auckland, the nation's most populous city, cost NZ$296 a megawatt-hour at 4 p.m. local time, four-times the June average last year. Prices have fallen about 22 percent the past week as rain on the South Island lifted lake levels and mild temperatures reduced heating demand.

Weather patterns appear to be returning to normal and there is no reason to expect further earnings losses during the rest of the year, Tempest said.

Output at the Tararua wind farm, halved in May, has returned to normal, and the company has warranty cover for any output lost in repairs to 31 3-megawatt turbines the company installed at the nine-year-old site last year, he said. Eighteen of the Vestas Wind Systems A/S turbines have had a faulty gear replaced so far.